Palin’s relationship with the oil industry is complex. Republicans and the media frequently credit Palin with taking on the oil industry related to an oil tax and a gas pipeline. The claims appears to be in good measure true, yet also somewhat overplayed, in both cases.

Fortune:

Palin reached the Alaska statehouse in 2006 after trouncing incumbent governor Frank Murkowski, patriarch of one of Alaska’s powerful political families, in the Republican primary. The former high-school basketball star, beauty queen, commercial fisherman, and mayor of Wasilla (population 8,471) ran on one big issue: Exploiting her state’s billions of dollars worth of natural gas on Alaska’s terms, not on the oil companies’ terms.

For years, Alaskans have dreamed of the revenue bounty promised by the state’s natural gas resources. But until recently, prices were too low to make shipping natural gas to the lower 48 states profitable. Murkowski had negotiated a deal with the Big Three oil companies of Alaska – BP (BP), ExxonMobil (XOM, Fortune 500), and ConocoPhillips (COP, Fortune 500), which hold long-term North Slope leases – to finance and build a pipeline to get the 235 trillion cubic feet of natural gas estimated to be buried under the North Slope to market. The deal guaranteed a tax cut for the oil companies, and promised that Alaska wouldn’t change those rates for decades.

But when Murkowski brought the proposal to the Alaska statehouse, it was rejected as a sweetheart deal for the oil companies. Several of the governor’s negotiators were later indicted, accused of making back-room deals with the industry. Voters subsequently booted Murkowski from office. You don’t mess with revenues from oil and gas in Alaska, because it goes into Alaska’s Permanent Fund, which sends a check to each resident every year.

Once in office, Palin took an aggressive stance toward the oil companies. Her nickname from high-school basketball, “Sarah Barracuda,” was resurrected in the press. Early in her term, she shocked oil lobbyists when she was so bold as to not show up when Exxon CEO Rex Tillerson came to Juneau to meet with her. Palin, after scrapping Murkowski’s deal, would not give Big Oil the terms they wanted, yet insisted that the companies still had an obligation under their lease to deliver gas to whatever pipeline Alaska built. She invited the oil companies to place open bids to build a pipeline, but they refused. A bid by TransCanada, North America’s largest pipeline builder, was approved by the legislature in August.

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Despite her sparkling profile outside the state, Palin has had her critics in Alaska. She faced bitter opposition from the more conservative members of Alaska’s legislature over the tax increases. And many in the bureaucracy feel that without the oil companies’ cooperation, the pipeline will never get built, since oil companies still own the gas under their lease of the North Slope. And now that TransCanada has bid for the pipeline, Alaska is committed to covering up to $500 million of its costs regardless of whether the pipe gets built.

Recent claims by Palin appear to bend the truth.

In her speech at the RNC, Palin said: "I fought to bring about the largest private-sector infrastructure project in North American history. And when that deal was struck, we began a nearly forty billion dollar natural gas pipeline to help lead America to energy independence. That pipeline, when the last section is laid and its valves are opened, will lead America one step farther away from dependence on dangerous foreign powers that do not have our interests at heart.

The Anchorage Daily News:

THE FACTS: Palin implies that construction has begun on a major natural gas pipeline from the top of Alaska into Canada. That is not correct.

In fact, no building has begun and actual construction is years away, if it ever happens. This summer the Alaska Legislature, at Palin’s request, passed a bill under which the state will issue a “license” to a Canadian energy company, TransCanada Corp., and pay it up to $500 million as an incentive to someday build this enormous project, which Alaska politicians have long sought with little success. The license is not a construction contract, and federal energy regulators have not yet approved the project.

Palin also puts the price tag for the project at $40 billion, an exaggeration. This is roughly $10 billion more than most cost estimates industry players and consultants have made to date.

During her commencement address at the Wasilla Assembly of God, Palin asked students to pray for the pipeline saying that “God’s will has to be done in” making the project go forward: